Can Cross-Border Transportation Strengthen Industrial Chain Linkage for Corporations: Evidence from the Quasi-Natural Experiment of the Launch of CR Express

【Authors】

LU Fucai, ZHONG Shiyun, ZENG Xin & XU Yuanbin

【WorkUnit】

School of Digital Economics, Jiangxi University of Finance and Economics, 330013.

【Abstract】

The economic effects of international infrastructure have garnered significant academic attention. Among these, the China-Europe Railway Express （CR Express）, as a transcontinental rail network spanning Eurasian, plays a crucial role in reshaping trade dynamics by creating new international transportation corridors in Central Asia, building platforms for economic cooperation, and ensuring the stability of international supply chains. While existing literature has extensively examined CR Express’s operational outcomes, no study has investigated its impact on enterprises’ industrial chain linkage or elucidated the mechanisms through which cross-border transportation infrastructure affects supply chains. Transportation infrastructure, as a crucial nexus between production and consumption, is deeply embedded in all aspects of industrial supply chains. The emergence of new cross-border transportation modes, such as the CR Express, reshapes cooperation, division of labor, and resource allocation patterns among supply chain enterprises.
This paper employs the CR Express as a “quasi-natural experiment”, matching data from cities where the CR Express was launched between 2009 and 2021 with Chinese A-share listed companies using a multi-point difference-in-differences model. Our empirical research finds that the CR Express significantly strengthens enterprises’ industrial chain linkage by reducing external transaction costs and expanding the market scale. Heterogeneity tests further demonstrate that the strengthening effect is more pronounced for enterprises in coastal provinces and less marketized areas, high-tech enterprises, state-owned enterprises, small-scale enterprises, and those without overseas operations. Further analysis reveals that the CR Express also enhances industrial supply chain resilience.
This paper contributes in three ways. First, it enriches existing literature on the CR Express by examining its impact on industrial chain linkage from a micro perspective. Second, it identifies new mechanisms for strengthening industrial chain linkage through cross-border transportation. Third, it provides important policy insights for building stable industrial supply chains amid rising anti-globalization pressures.
Our findings yield three key insights. First, policymakers should account for the CR Express’s enhancing effect on industrial chain linkage when planning routes and selecting node cities. Second, optimizing subsidy mechanisms, simplifying trade processes, and improving cross-border infrastructure networks can better leverage CR Express’s benefits for enterprises. Finally, the highly reliable transportation service provides conditions for enterprises to optimize supply chains, increase connectivity with suppliers and customers, reduce reliance on single markets, and strengthen resilience against external risks.

【KeyWords】

China-Europe Railway Express, Enterprises’ Industrial Chain Linkage, External Transaction Costs